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Us 53, America 48, China 40, Washington 24, Reid 15, Boehner 12, United States 11, Cap 9, U.s. 8, California 7, Madam 6, United States Senate 6, Texas 6, Iowa 5, Mrs. Hutchison 4, Maryland 4, Harry Reid 3, George W. Bush 3, Mr. Durbin 3, Mr. Mcconnell 3,
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  CSPAN    U.S. Senate    News/Business.  

    July 26, 2011
    9:00 - 12:00pm EDT  

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turn to the experts. [talking over each other] >> i will just throw that out. what do you think is politically feasible in this environment? next question? >> i alluded to in my opening statement. political feasibility depend on political leadership. political leadership on individuals who have a deep feeling for and intellectual concept of what is happening to our society at large. ..
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>> i'm not in the mode of bashing president obama or anything like that, but i think the times call for bold, innovative leadership on the part of the president of the united states. if we don't have that, then it's -- it sort of comes back down on our side and the congress, and we take our excuse from our constituents in many ways, and then we just lack that kind of cohesiveness that we need for political leadership. i think we need a strict
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examination. this is getting a little bit off. we need a really good examination, how we went in the short span of a little over two years, from a president elected with a huge mandate, huge mandate, with a progressive mandate. and a congress that was run by the house and the senate where we had 60, at one point, 59, 58 votes now, yanked around by the tea party on the house side. and now we have 53 votes on the democratic side of the senate, and out of that you have four or five that sort of have gone wobbly in the knees on a lot of issues. how did we go from -- how did that happen? i think we need to look at that and examine that, find out why we have gone this far in the other direction in just two and a half years. i believe, and i will shut up on
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this, i believe it's because we haven't paid attention to the underlying real problems in america, which is, leo and this task force has pointed outcome is the jobs issue, and especially among young people. read a part in this report were talks about young people can't find a job. they been educated, they can't find a job. that kind of hangs around, not just for a couple of years but the rest of their lives. and that's one of the most debilitating news happening in our society today is the lack of jobs for young people. well, i'll get off here. >> go ahead, sherle. i think it's important to understand that politics is not static am and that the economic realities will appreciate the politics the next six month. those economic realities are pushing is closer and closer, to a major, and additional major downdraft in the economy that we've seen showing up in all the
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data currently, and all the underlying factors are moving us towards retesting of potentially pushing us towards a new financial crisis as well. given the ongoing exposure of both the government and banks to a double the in the housing crisis, cause now as much by unemployed as the original bubble. so i think it would be a mistake to assume that the static picture we are seeing in the lead up to the debt ceiling is going to be the politics that dominates the discussion six-nine months. of course, we have to play a role in redefining that. but after the initial euphoria may take place, market gets some sort of interim, the realities of the debt deflation that is taking place throughout the american economy, that is going
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to grip large parts of europe, the slow down that is taking place in asia and emerging economy, will be the dominant reality. you can't just invent the economic realities, but you can interpret them in a way that will give us another opportunity. i think what's important and what leo has done with his leadership is to give us a platform when that opening reemerges in the next six-nine months. so let's not assume we are in a static political environment. we will be in a dynamic political environment because we are in a very serious economic situation that is going to impose realities on the political leadership and a new way that you haven't seen in the last six months. >> congressman? >> the american public wants a job.
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that's what this is about. they want a job. they are want to go back to work. they want to support their family. they want a job. it's incumbent upon all of us who think we're in politics and want to be political leaders to develop a jobs agenda, a program that will create the jobs that are necessary in america. i agree entirely about mr. schwenninger, when you talk about, it's going to switch. it's going to switch from this deficit which is really
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>> a lot of support for china's currency, national infrastructure bank and i don't know, sir seems to me hard to go home to iowa and california and say buy an american doesn't make sense. >> we did in the defense bill. >> and you did it well. >> and the steamers do with the high-speed rail. the international rail companies, high-speed rail companies, not one company in america, but when the bill was passed and 12 windows put up there. they all rush to establish manufacturing facility in the united states. it can work. i'm caring key piece of legislation that said if you'll use our tax dollars to go green to put up the solar or the wind then you will like american. why should we allow our tax dollars to buy chinese solar panels? makes no sense to me. >> how about your big ridge? tell us about that. [laughter] >> it does seem as if, if
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anything, the politics, as dynamic as it might be. i certainly agree on that. might be going in the opposite direction. i'm talking presidential politics, the bloomberg breakfast the other day in which it seems as if the clinical strategy of the administration is to avoid a discussion of jobs to the unemployment rate at all. but let's talk about some of the specifics if we can. maybe patrick ewing talk a little bit about in more detail about the china trade issue, the environment for getting comfortable with china -- tougher with china. >> i'm a member of the u.s.-china economic review commission. this is a bipartisan congressional think tank on china. we've issued a number of reports, almost all have been unanimous, republicans and democrats seen it in exactly the right. i'm a member of the commission. i'm not speaking for the commission at this thing.
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our website is -- everything we do is up there. let me just quickly go through this. in the last 10 years the united states has run $6 trillion worth of trade deficits. we have run $2 trillion of trade deficit with china. when you're running these kinds of trade deficits a major outsourcing your manufacturing. you are bringing it back. most of our imports from china are manufactured goods. 60% of china's exports are made by foreign invested companies. when you're shipping your manufacturing abroad, that is tied to your budget deficit because revenue that used to be produced year, good cheer that produced wealth are now being produced abroad and imported into the country. people who used to good jobs in this country and pay taxes are now no longer paying taxes. we are putting money into keeping them going through unemployment and other things.
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but i've heard, i've watched this debate going on in the congress, and i have not heard anyone tying the budget deficit to the trade deficit. the american people know something bad is happening. they always talk about the fact that you go to a store and you can't even buy anything made in america. now, what china, china was a great civilization. they fell apart. economies took control. the real genius come along in 1979. he said we need foreign investment, foreign technology, foreign market. and that's the way we're going to build what he called china's comprehensive national power. they don't just talk about their economic power. they use the term called comprehensive national power and meaning political military, and economic. and it is all based on economic.
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if you watch, their military is growing pretty rapidly. so i don't mean to be a china basher, and i'm not. i first went to china in 1981. i saw a poor country. you go now as a very prosperous and booming country at least or three or 400 billion of them. but they have a strategy. they are incentivizing our companies to outsource production to china. instead contributed job growth in this country, our companies are containing the job growth in china. there are various things that we could do, and we talk about that in the report. our guys get a tax break for building jobs abroad that they don't have to pay taxes on that money that they earn. is that a crazy policy are what? we talk about that in the report. china under prices its currency and the imf just yesterday said the china currency is undervalued at what does that mean? it's more expensive than it should be.
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the goods from china coming here get an export subsidy. further incentivizing american companies instead of building production here to build them in china and ship it back if it that's all part and parcel of what's happening. one last thing if i could speak. there's something called indigenous innovation. wind chime join the wg of the used to say to american companies if you want access to the china market, you have to make stuff in china. when they joined the wto we said no more of that force technology transfer. that in there. they won't do that. here's the way they do it. they tell an american companies you want to sell to the chinese government you've got to be on this list of companies. or if you want access to our market you got to be a friend of china and you are india and china. so our technology, our brainpower and what we did well is how the chinese are getting that technology and know-how in
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china. to what they called indigenous innovation. that's contrary to the wto obligation. what do they say to defend it? they say we're not really forcing the companies. it's not force technology. we're telling the companies if they want to be a friend of china and make money in china have got to transfer their r&d and technology. we're not violating our obligations at all. but we can we incentivize this game. we've got to get our house in order and we incentivize our guys. made we should have lower taxes on companies that produce gdp in this country and higher taxes on countries that produce gdp in china. there are all kinds of things we can do. we should not let this go on because our children's future is being sacrificed. >> the challenge does seem to be to try to package this as a national competitive strategy that doesn't run afoul of views on free trade. certainly, a lot of proposals
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like this run aground because they are perceived as protectionist. selling it, going back your point, senator, about the right kind of leadership, what do you think about that? is a possible? are we able to move beyond some of these sort of this adoration of the free trade gods, if you will, that has persisted root for the last couple of decades? >> i hope so. i hope that, a member of us have been saying fair trade, not free trade. fair trade. this goes back to nafta and everything else. i remember a debate i had with bill clinton on nafta. don't get me started on that. spent but it is time in some sense to replay those debates. >> when did it become wrong to protect america? what's wrong with protecting america lags i don't get it.
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i really don't, particularly when the policies that have been in place for the last, i don't know, 20-three years are exactly the opposite. they don't protect america. they harm america. look at the tax policies. discussed here, at least in part. why do we reward american companies with a lower tax if they offshore jobs? not one republican voted to repeal that tax. we thank the senate, we thank this saturday last december but they're still more that is in the tax policy that literally rewards the off shoring of american jobs. what's wrong with protecting american jobs? we ought to adopt the policies the chinese have adopted. what's wrong with that? if it's good for the chinese and they can get away with it under the wto and we ought to be able to adopt similar policies and get away with it. use our tax dollars to buy an american-made equipment. 18 and has since, every gallon of gas, 26 cents for diesel, out
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of every gallon you buy, goes out there to buy what? yes, i had nothing to do with the bay bridge. it was a horrible mistake. to save 10% they went off and bought chinese steel and thousands of jobs. thousands of jobs are in china. they are not in california. they are not in america. at the end of the day it turned out to be more expensive. >> one of the things, michael, the congressman is driving to and again, more ably than i, if you take the 15 proposals we have, within which each one you can find counterparts in 19 of the g20. what the senator and the congressman are saying, and we're trying to say, is we are not being protectionists, we are being reciprocal. 19 nations have domestic policies, domestic policies that are multiples of what we have today and what do we have to do
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is on because people like john and tom harkin. so we are saying, if they can do it, let us do it. tom harkin was the architect of the phrase fair not free entrée. it's just there. these trade agreements, we've had 11 of them. these two gentlemen, these two members know that 11 of them have failed to deliver their promises by large amounts. they have not created jobs. they have not improved our trade balance. they have gone the other way. at the same time we look ahead to the three that on the table and we find them similar faulty. it's not fair trade -- sorry, not free trade, it's simply free trade. >> no question about it. i've been covering this for better part of the last couple of decades and have watched these proposals, these ideas flounder. again, getting back to this idea of god to free trade.
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and i guess my question is, isn't it about time, isn't this the moment for ideas like this, we have seen a near disastrous failure of this sort of absolutist idea of free trade and that it was supposed to raise all boats, particularly american votes. it was supposed to be good for america. the results are kind of in. and i guess i'm just wonder why the political environment hasn't changed more than it has. even accounting for the distractions caused by the rise of the tea party, you know, the all embracing focus we're seeing now on cutting the budget. i'm not sure why some of the underlying thinking -- these proposals, versions of them were sitting out there for a while. it seems like now more than ever there is movement. >> there is one sector of the american economy that has not
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suffered of the so-called free trade and huge trade imbalance as we have. what sector am i talking about? the financial sector. the financial sector has not suffered a bit. they have made quite a bit from this. and so, you have to look at that. why do we still genuflect at this altar free trade, free trade, when the dad and the facts are in over the past? you've got a huge sector that has a lot of influence in congress. that like things just like they are. they're doing quite well, thank you, in the financial sector. and that's what's happened i think in our society on a broader perspective. we have moved from manufacturing, leo, being a financial-based economy. read kevin phillips book, wealth of democracy. it came out what, about 10 years ago or something.
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read well for democracy. he lays it all out of how we move from making things in this country to just spinning a lot of money around ending a financial place. >> indeed. and the underlying balance of power between labor and capital, which was sort of an equilibrium for a long time has changed dramatically, which is one of the reasons why the american labor movement is just a shadow of its former self. capital goes anywhere it please the labor is probably more stricter than it was during a period of globalization than a century ago when migration was freer than it was. now you have a very, very unequal situation in a fundamental sense. >> if i might take some other of the conditions that are in this report and apply them -- some recommendations, which was signed world. son world manufactures solar panels. it's the only domestic manufacture of solar panels.
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the present comes and wants to talk to me. we have about 18 months and we're going to have to make a decision to go out of business in america. why? i ask and he says well, a couple of things. eight, china currency. it happens and in your report here to talk to china currency. speak to that issue and you talked about it a little bit. we have come back to. and he said you need understand the way in which china is financing the businesses. chinese government and finances their business with loans that are not a failed anywhere else. supercheap loans, loan rates and obligations that are unavailable. they don't need free money. available to those companies. and then you've got the issue of make it in china policy. he said we can't compete with it. we're going to have to make a decision to shut down our
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manufacturing in america. so what does that mean? california, $86.8 million, let's see, iowa on this list? i don't see it, hang on. massachusetts, arizona, texas, oregon, on and on and on. gone. jobs gone because of the international, or the lack of american policies. you speak to each of these things in this report. how would we apply it? >> john, if i'm not mistaken, correct me if i'm wrong i think there's only two, maybe three manufacturers of solar panels left in america. >> one spent only one? >> that was the last one. >> yet we are the ones who develop the silicon chips. we did the research. i was on the tech committee back in the '70s and '80s. we were putting a lot of taxpayers money into the development of the technology, the basic research and getting it developed, yet it's gone
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offshore no. >> let me be more specific. this is the only company that does all of it in america. other countries may assemble pieces in america but this is the only company that does all of it from making the crystal to the cell and then the panel. >> i think it starts and stops with, do we want to have a national manufacturing policy or not it's the other 19 members of the g20 have such a policy. it's very specific. china's is the most specific by far. but it would not tolerate a circumstance were only eight or 9% of american workers on then in the sector. it would not tolerate a world where small and medium-size enterprises can't get loans. it would not tolerate a world where china on that plan that the congress been referred to, got its sights it gets its sights for free, construction loans for free. it gets a tax holiday.
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that's the competitive for the plan that the congressman is describing. it starts and stops with can we as a nation survive much longer with eight or 9% of making something, because if you think you can, you can't. then you have to go to where would we most immediately see a manufacturing renaissance? and that is in that $3 trillion of decrepit infrastructure. you had a by domestic aspect to it. you have the policy first, michael, and indicate in the pants, the opportunity would be in our own infrastructure until we got this thing balanced step which is your number one recommendation in the task force report. i wonder whether you would talk a little bit about that, some of the other recommendations. are these in order of importance or feasibility? >> no, they are not. but i do think the group felt
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very, very strongly about two issues. one is bank -- unser, bank coupled with by domestic and a more harsher perspective on china trade. let me digress and if i can on the bank. the bank must be a bank. it must have an equity capitalization accompanied by a debt to capitalization. yet when you go to the white house and talk about the bank they talk about money that would come out and dribble out in block grants. yet we know from the senator's work and the congressman's, we know, from the wonderful treasure of the state of california that calpers, the largest pension fund in the world would love to have an investment opportunity in a national infrastructure bank and be leveraged for that bank. it's a superb idea. the members of the senate and house that have focus on this issue appreciate the
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opportunity, michael, yet we can't get past a fellow named tim geithner who wants no banks except is a banks. and a wonderful congressman, leonard boswell just walked in. i can't find for a small or medium-sized manufacture in iowa a $50 million loan today is my life depended on it. and i just watched j.p. morgan give $20 billion loan commitment to at&t to buy t-mobile which is a problematic deal. whether congress is trying to do in iowa, and the senators tried to do in iowa, it's been diminished i in sensitivity to small and medium-sized manufacturers. and, frankly, to the absence of a fundamental manufacturing and industrial policy for this nation. >> if i could make just one. one of the things this report recommends on page 33 is that we move the balance our trade in five years. maybe the five years but we need
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to balance our trade. let me just help you. the administration has set a goal of doubling exports. if you look at what's happening, imports are increasing faster than exports. so when you have a negative net export figure, meaning your imports are less than your exports, that's a drag on your economy. we have a massive net export figures year after year. warren buffett, and a famous article in "fortune" magazine in october 2003, advocated that the united states needs to adopt policies. the balance industry. people always hear, when you hear in a debate now, china own so much of our treasury, we are dependent on them. where did china get the money to own so much of our treasuries? we gave it to them by running these massive trade deficits year after year. so here's the way the chinese do it. when the dollars come into china, the chinese government
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buys those dollars from the people, brings an end and you didn't give you a. than the chinese government issues bonds to suck up yuan. the chinese government ends up with a dollars. they don't want to put them in a mattress so that by our treasuries. therefore, they get income from the treasury. they also get leverage over us. is this a crazy thing for this country to be let going on, and the whole is getting deeper. as tennessee ernie ford used to say, we are another day older and deeper in debt. we've got to change the tragic when kennedy said we would get to the moon in this decade, nobody knew how to get to them and. but he set the goal and we figured it out. we can figure these things out if we set some goals for ourselves. not just doubling exports, balancing trade. sherle? >> yeah, i wanted to expand a little bit on those comments, because i think this is really
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the linchpin between the micro goal of rebuilding our manufacturing sector and the macroeconomic goals relating to jobs, jobs, capital and insufficient demand. and it isn't just calpers that is looking. there is paradoxically as we are debating, reducing and doing a deficit deal, which will actually count the amount of fixed income data available. there's a shortage of fixed income debt that is occurring because of the collapse of the mortgage market. one. number two, as baby rumors approach retirement, fixed income investments become much more important to them. and three, as emerging markets population into their prime saving. no, there's going to be an additional flood of capital. we actually need to generate
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attractive fixed income investments that a national infrastructure bank, nor to have a workable banking and financial system in the world. that's one thing. so you put together, what infrastructure and infrastructure bank does, it leverages and puts to work all this idle capital. spent it's not just one-to trigger its three-fort wayne. you add in all the excess liquidity that is floating out in global economic. you crowd in like-minded amount of not just putting private capital work in debt markets but you put crowd in private investment into, because of the multiplier effect that infrastructure investment has. moreover, then you also facilitate not just directly the
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manufacturing sector, but more importantly some other key sectors of the economy upon which america's future rests. in particular, the energy and transportation systems. we have an enormous abundance, representative garamendi talks about solar. let me talk about natural gas. we have an enormous abundance of natural gas and shale oil locate and all parts of the country. we don't have the infrastructure to move that, or to put it into use. there will be a trillion dollars investment in a known as amount of jobs that are needed over the next five to 10 years to build out the infrastructure to make as to actually balance our energy picture. we have an enormous potential if we rebuild the manufacturing base to move goods and services around the country's.
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one of the principal ways of doing that is our enormous inland waterways. not just the mississippi, but the great lakes. we have allowed them to deteriorate so enormously that they are not as energy efficient. these are the most energy efficient ways of moving goods and services around the world. we need five to $10 billion of investment over the next five to 10 years to be able to move the goods and services in a much more efficient and attractive way which makes it very attractive to manufacture things in the center of the country, and actually move them around a new population centers that are located, whether it's the great lakes or texas. so infrastructure investment and in bank particular where you can leverage a small amount of public capital, as leo has described, into a much larger, take one to $2 trillion off the sidelines, put it to work, both
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in the debt and equity markets, has an enormous appeal as the centerpiece of the economic recovery and jobs recovery. >> before we turn it over to the audience for questions, i want to know if any of the panelists have any other thoughts on the specific proposals here. and the professor who is supposed to be a member of the panel, weather is -- i just want to know whether you had any thoughts of your own. or press return stat is director of the department of international affairs at the international association of machinists and aerospace workers. , as was an adjunct professor of law at georgetown. any thoughts, professor? >> i'm going to hide back in the
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corner. thank you. i must confess when he said professor, i was looking around the room for my father. just a couple of very quick things. one, i really do want to thank leo and the new america foundation for all your work on this. not only is it time but it is critical. i think it goes without saying that we're in a crisis, and it's urgent. we can ill afford to spend all of our time getting more studies done, and kind of sifting. the answers are here. and we just have to act, and act as the senator mentioned. by showing true leadership. in and out of government. a couple quick points one is on one of the recommendations that has been discussed on one of
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them that hasn't. the one on buy america is obviously a critical one. i think we're all shocked at the pushback that many of us received when we're trying to get buy america locked into the recovery act. i think we were shocked about pushback on that because it was seen as being protectionists and representative garamendi, i couldn't agree with you more. would like to collect industrial policy. we would like to it national and economic security on that pic and i don't think there's anything to hide behind. but when we're talking about buy america, we are not on talking about buying goods that are produced here in america using u.s. supplies and raw materials, but we also have to ask ourselves, the taxpayer would be shocked to learn some things we consider to be domestically made only a 51% domestic content in them. if you are to ask most folks
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down the street or even folks, maybe some folks at the federal trade commission what is made in u.s. a meantime it would mean and how different thing. it would mean we may hear in the u.s. the second part is there's no really uniform guidelines throughout government on defining what is domestic content. some would be shocked to learn that intangible items like the guy of intellectual property rights and so forth are figured in, in some cases, to determine what domestic content is. and those things should be low-hanging fruit, and it would be interesting to see those are actually a post that. particularly when we see unemployment as high as it is. it should be a low-hanging fruit to make sure that our government procurement employers people here. the second related recommendation goes to the issue of employment impact statement. we've got environmental impact statement. they been around. they been tested for a long
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time. it doesn't appear that many government agencies have incorporated a simple question when letting out a contract, and award, whether it's for a huge military issue i've the tanker deal, or even a smaller one to simply ask the question how many direct jobs is this going to greet in the u.s., what kind of jobs will be created, and how long will those jobs last. these are simple questions that should be factored into all of that. and if they were, at least it would give policymakers and our fine political leaders that are up on the panel much more information that they can consider when they fund government programs, when they find procurement and so forth. thank you. >> thank you very much, own. i would like to open it up to the audience. go ahead, center.
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>> when we were thinking about, two things on the infrastructure. it's got to be an investment that is in addition to but not a substitute for the level of the federal government, grant levels that we have right now. i still think we need some paygo as we go along with gasoline taxes and things like that. you have to be careful. now we don't have to spend any federal money whatsoever on the infrastructure. that's just one. secondly, to really invest in long-term infrastructure projects you need what others and i have referred to as patient capital. capital is not looking to spend over in a hurry. here is a place where we can get really a twofer. my committee hasn't had a series of hearings. i started a little over a year and half ago on what's happening to pensions in america. and the fact that people are
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losing their pensions at an alarming rate. what started in the '80s when we shifted from defined benefits to defined contributions, 401(k)s. so everybody could have their 401(k)s and take it with them, and it all sounds so nice and good and everything like that. but it has decimated any kind of a pension system. in other words, something you can rely on until you die. 401(k)s we know now about two out of three people that have 401(k)s that are going to be approaching retirement within the next 20 years to not have sufficient money to last in their lifetimes. a lot of people are taking out lump sum of $100,000 thinking i'm not rich, but they don't have any kind of retirement. one out of every four persons in america today of working age have absolutely zero amount of money in a pension. zero. so we need to rejuvenate the
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pension system so that we have more of a defined benefit program. we can build a hybrid system so that it is portable so that you can move around no matter where you go. you have a system like that. but that didn't provide you with patient capital. capital can be invested for long periods of time. and that's where the infrastructure bank and others go to get that kind of capital, and guess what? night have a pension system that will pay back the people later on in life. so i hope that we can keep that in mind about the benefit of a defined benefit pension plan. >> we will take some question. yes, sir, right over here. >> my name is mark from the council of scientific society. i want to commend you first on being able to integrate all number of separate realms and
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ideas. everybody who is describing the solutions, there's a lever they want to push to solve everything. realized and have shown us that you have a lot of different parts of the system. among the parts of the system that we seem to always get to, the matter how we follow the trails, seems to be our trade balance with china. i mean, in college or sets of data seems to be a bigger lever than most. and if you look at how that came about, we have a mechanism that was supposed to solve this by preventing this from happening. it doesn't work. why don't we re-create it immediately in a form that will? i don't care whose name it has and how it works, but set it up so that it can function and solve the problem of fair trade, balanced between countries a strong currency exchange. if we do this promptly, set a
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time limit of a couple of years, and have it completely done, and there may be a lot of things that happened between u.s. and china. there will be some friction. and elena kagan have its own view of what the world looks like and so do we. somewhere in that exchange rate with their currency goes up 40% or hours be values in some way, we have to make an exchange that can help generate the necessary stay-at-home kind of things. second thing about patient capital. i love the idea that there's another way to look at it. our financial system is the tale that is driving the dog. it makes all of the large companies in the country look at short-term profits. in order to do that they can't invested long-term potential opportunities. and that driving force has been pushing one of the drivers that moves a lot of our jobs
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offshore. we have a lot of invention in this country but it's not been able to be kept here because it's tuesday becomes valuable enough it has an opportunity to go offshore and make a higher profit. so these are the things we have to attack together. >> okay. >> and i think you've got a good set of steps to begin. and the last component is education. i appreciate you looking at community colleges and how to integrate, but we have to have a university system in which the people who graduate are effectively able to speak his excuse me. can we -- that's confined to to to questions and not speeches. thank you. >> let me give you three quick answers to that. in terms of trade, we spent a lot of time in the document on enforcement. enforcement of existing agreements which the senator spoke to. we mentioned the word as an inducement to proper behavior if
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we don't see the sort of behavior that we are entitled to, we advocate tariffs. in the area of the corporations, i'm very, very strongly opposed to a lot of these multinational practices. but as the representative and the congressman and the center will tell you, we don't have in place a tax structure. so we have to put that in place. finally, on education, with all respect, it is one of the greatest insult to the american people with those roughly 30 million men and women unemployed today to suggest that there is insufficient educated and overpaid. everybody in this room and in this nation wants to fix the education system. i promise you there are millions and millions and millions of sufficiently educated insufficiently motivated and sufficiently unemployed americans to fill any gap we have to fill in the near term. we didn't see education as our prerogative. that's left for other members.
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>> thank you. let's take more question. and plea to keep them short and make sure that they are questions. identify yourself at the outset. this gentleman here in the yellow shirt. >> paul gallagher. i just want to bring up that in creating jobs, it's best to take the order that franklin roosevelt did. first deal with it completely out of whack banking system that is exhausting the credit of the nation. >> is there a question in there? >> we can see in europe yesterday the bailout policy spirals on and all until it destroys the economy. so i wanted to bring up that glass-steagall restoration, has the gone beyond 35 republican and democratic cosponsors, both democrats and republicans are pushing for that bill. and invite anyone on the panel
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to comment on the relevance of that. >> it's extremely relevant. i wasn't insurance commissioner for eight years in my life and i understand exactly what happened when that mistake was made in 1998 and glass-steagall was repealed. it out to be reinstituted for many, many reasons, some of which you've already described. >> let me just add. the other part of the rose the agenda was to create a parallel banking system, public purpose finance system. my colleague has written i think a very important study on how you re-create a public purpose finance system that has been eroded over the last 10 to 15, 20 years. and it seems like the first missing piece is to come with the infrastructure bank in particular, is put in place ways to be able to channel access idle capital into productive
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public investment and public and private investment. and, indeed, one of the true legacies of the new deal were all these loan lending and banking quasi-banking systems that were put in place in the 1930s and '40s. >> for those of us for being here as long as i have, we all have, which we could change and other votes were proud of. one of the ones i was proud of, i was one of eight senators in 98 to vote against the repeal of glass-steagall. [applause] spent i didn't mean to do that. i'm just saying that -- [laughter] was a lot of us is based on time. i just wanted to say i remember the pressure that was put on us by the white house, by bob rubin, by larry summers and others that this was the way to go and nothing to do, and also what's his name? ahead of the fed.
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greenspan. [laughter] >> how soon we forget. >> would like to forget. >> and i just wanted to mention, correct me, senator, your floor speech at the time was quite warning of what might happen. let's take some questions at the back of the room may be. the lady there right along the aisle. >> i implore and, a freelance writer. i've been doing number of job creation panels over the last year. and one thing that always seems to be left out how to remove impediments to even existing jobs, and the thing that really concerns me is the growing practice of use of credit reports by employers. there's been a bill sitting in congress for ever that's not getting any traction here six states have passed similar legislation. and i want to know from the
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panel if this is an area of work they would consider bringing into the task force. there's almost nobody in this country doing any serious work on reining in this practice and it's creating an underclass of millions of unemployable people, people like me, who have degrees from oxford and georgetown, and cut out completely from federal work, federal contracting and many, many private sector jobs because of the requirement to have sterling credit. even though we know credit reports are often filled with errors. >> i think what we really, there are many, many issues involved in giving the american economy back on track. you just raise one other. there are probably another several dozen of employment discrimination problems that exist. credit reporting can be useful. it can also be very
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discriminatory. you raised that issue. it has to be looked at in the context of employment discrimination of many, many types, and that happens to be one. get something going in congress? we can't get the big things going. the overarching issues and serving the discrimination issues are one of the things we deal with. if it's okay with you, i would like to take this opportunity to ask my colleague, leonard boswell, to take my seat. i would like to get out of town before the faa shuts down. [laughter] so thank you very, very much for the opportunity. [applause] >> not often you have the luxury of having a reserve congressman. [inaudible] >> congressman connolly haven't heard from you so if you'd like to her housemates be i know time is short. i just want to salute all of you for having this and the thought
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process. we are certainly in a crisis, and you all know that. and history is going to be written. what's it going to say? i was somewhat relieved, even as for mr. summers to leave town. i wonder what would have to do to get mr. geithner to leave. i'm glad to see them go back and do what he does well. he's a good professor. i would like to see the other gentleman go do what he does well. we are in a crisis. we have got to get to building things with american hands, and until we can do that and all this possibility, we're going to continue to go the wrong way. i will just say this, i think it's okay, even though amnesia has set in of how we got where we are in this deficit situation. but we've got to do with it. it's okay to have a debate on
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it. in front of all the american people. they will get a. but we have the capacity to do other things, economic development, infrastructure, all these things, why are we doing that. it's very, very frustrating. the country needs a. the country is in great need and there's some things there that we know we have to do. go to any stake him in the city and you will find out that we are falling way behind, and think about our asian neighbors are our european neighbors, and we think we will compete. we've got to get to doing things. thank you. i'm sorry for -- >> no, thank you. we have time for one more question. yes, sir. on the end. >> just two quick things that happened to be brought up. my name is rick lopez. just a couple of things that i think are fundamental to bring up. these questions are for the most
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part directed to the representative. one, i think it's pretty obvious that mr. obama has come out publicly and pushed the agenda of real brutal austerity, and he's talking about putting social security on the table, which most citizens in this country knows that means the chopping block. my question to you is the going to be some serious resistance against this president? and this is a more technical question. if we look at the effects of sustainable technologies on third world countries, i mean, it's really murderous and it keeps these countries backwards. you can't run a modern-day hospital with a window. i'm sorry, it's just not possible. and so, are you guys willing to reconsider technology that are efficient and acts of a large enough scale to deal with the crisis such as nuclear power development? i know the media has been hysterical about trying to make people be afraid of nuclear power, but i think we need ambitious programs and i'm
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wondering if you guys agree that we should have programs like the apollo program for the atoms for peace program which were the right kind of program which stimulate the economy? thank you. >> well, yes. first of all there will be resistance to any cuts in medicare or in social security. social security is sent. it does not contribute to the debt. you all know the data on the. and quite frankly looking ahead, after 20, 36 -- 236 went social security is anticipated to be 75% of what it's supposed to pay out, not zero, 75%. to make up that additional 25% for the next 50 years, why are we talking about raising the cap on payroll taxes? why is it fair, why is it that someone who makes $50,000 a year pays payroll taxes on every last
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dollar? someone who makes $500,000 a year only pays on 20 cents on the dollar. why is that fair? just by simply raising the cap to have sufficient funds to take care of any problems in social security for at least the next 50-75 years. so yes, we will resist any of those kinds of things. look, there's been a move within the republican party to privatize social security for years. i can remember in the '90s with the gingrich and wall street is always want to get its hands on some of that money. boy, talk about free money. i mean, social security that they can invest and start to spin around. so you about partial privatization. so we had to be very careful about any kind of partial types of privatization of social security. on energy, the cheapest barrel of oil is the parent of what you
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don't buy. what do i mean by that? the cheapest barrel of oil is the one you say. you don't buy, which means conservation. and here's jobs. here's jobs. infrastructure jobs. just -- rebuilding, that's not not the right word. >> renovation. >> renovating the building's we have in america to make them energy efficient. huge, huge savings in energy. and very you could lock in american-made goods, doors, windows, new heating and ventilation systems, geothermal systems where practicable in buildings. retrofitting the buildings in america would save you, i don't have all the data -- [inaudible] >> you can get it all and you don't put a lot of people. you can talk about nuclear power and wind and all that, and a law that is okay for the future.
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and why aren't we focusing on the things that will create jo jobs, stimulate manufacturing in america, and save energy, all at the same time? and that is renovation and conservation of energy. >> thank you very much. thanks to the panel. i think we have -- [applause] a lot of agreement here. the need for national policies. here's the report. read it, take it on. thanks so much. >> thank you. [inaudible conversations] [inaudible conversations] [inaudible conversations] >> the senate will be spending the morning on general speeches. we are expecting reaction to
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yesterday's debt reduction speeches by president obama and house speaker john boehner. then at 12:15 p.m. two additional nomination. the recess for the weekly party lunches and return at 2:15 p.m. eastern to begin debate on the debt reduction plan. it raises the day sitting through the elections of 2012 and reportedly cut the deficit by nearly $3 trillion over 10 years. it does not include tax orpresi: revenue t increases. and now to live coverage of the u.s. senate here on wi c-span2. the chaplain: let us pray. o god, our shelter in the time of storm, our strong tower, we praise your righteous name.
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lord, preserve this nation by the power of your might, leading our senators through this challenging season of our nation's history. keep them from the pit of disunity and discord and empower them to build bridges of corporation. give them the courage and humility to do what is right, knowing that you are the only constituent they absolutely must please. help them to discover the joy of trusting you and the peace of
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doing your will, receiving the strength you provide to those who love you. we pray in your sacred name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c, july 26, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable jeanne shaheen, a senator from the
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state of new hampshire, to perform the duties of the chai. signed: daniel k. inouye, president pro tempore. reid madam president? the presiding officer: the majority leader. mr. reid: following any leader remarks the senate will be in morning business until 12:15. the majority will control the first 30 minutes, the republicans will control the second 30 minutes. at about 12:15, the senate will be in executive session -- i shouldn't say "about" -- at 12:15, the senate will be executive session to consider the nominations of paul engelmayer to be a united states district judge for the southern district of new york, and ramona villagomez manglona, to be a district judge for the northern mariana islands. there will be two minutes of debate prior to a roll call vote on confirmation of the engelmayer nomination and the manglona nomination is expected to be confidence by a voice vote. -- to be confirmed by a voice vote. i would ask my friends on the judiciary committee, i'm not sure we need the debate today. it was already debated yesterday. i would hope we could go directly thew vot to that vote .
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the senate will recess from 12:30 to 3:30 for the weakly party caucuses. i ask unanimous consent that the three interns rosy or tailing tai go and rubin be given floor privileges today. the presiding officer: without objection. mr. reid: there's been a lot of talk in the last 24 hours about a so-called -- about so-called doing plans to raise the debt limit. to avert a dangerous default on this nation's financial obligations. as far as i can tell, the only dueling going on in washington today is between the republican parties and multiple personalities and there are quite a few. last night i introduced an amendment that i thought was fail-safe. it would prevent default using only proposals that the republicans have already
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supported. every bift our proposal was taken from the republican playbook. let me explain the plan. it would avert default while cutting $2.7 trillion from the deficit in the next decade. it would cut more money more quickly than a competing proposal introduced by republican leaders yesterday and would last for a long time, not just a few months, so we'd be back in the trenches doing the same thing at chri chris christmastime than we're doing now. the it holds harmless even the most wasteful of tax breaks and giveaways to big oil companies and billionaires who republicans have vowed to protect even if it costs our economy in the process. it establishes joint congressional committee to find additional savings this year and guaranteeguarantees the committs recommendations will be an up-or-down vote on the senate floor.
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no amendments or filibuster. yes or no. we've done this before. it worked well with our base closing legislation a few years ago. in every single spending cut in the proposal has already been endorsed by republicans. i repeat, every single spending cut in the proposal has already been endorsed by republicans. the cuts have already been voted for by republicans in both houses of congress. in short, it's everything the republicans have demanded wrapped up in a bow and delivered to their door. but now republicans say their demands aren't enough. they insist instead that we pass their plan, a similar plan in many respects, save for several crucial details. their plan also raises the debt ceiling but for only a few months. it cuts spending and includes no revenue increases. these are the major differences. it does not cut as much from the deficit as the legislation i introduced last night. in fact, not nearly as much. and it is a short-term fix that republicans know is untenable to
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democrats and the white house economists. in short, the republican plan they know will not pass the senate of the united states. not long ago it was untenable for the republicans -- this is what speaker boehner said about short-term measures in may. the speaker of the house of representatives, john boehner said in this may: quote -- "i'm not really interested in a short-term increase in the debt limit. our economy won't grow as long as we continue to trip it up with short-term gimmicks from washington." end of quote. house majority leader canter echoed the sentiment in june. "i'm not sure how -- i'm not sure how if we're not willing to make tough decisions now we'll be willing to make them later. it is my preference that we do this thing one time, putting off tough decisions is not what people want." end of quote. madam president, we agree. we agree -- certainly we agree.
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this is what "the washington post" said about republicans' bizarre about-face yesterday. "it seems that perhaps the only meaningful difference between the two plans is that the democratic plan gets it done in one fell swoop while the g.o.p. proposals disa short-term deal followed by another a year later, something that financial analysts say could lead to a downgrade of the u.s. credit rating and the republicans themselves once opposed." in fact, madam president, rating agencies have said as late as last night that the plan that i introduced will not cause a downgrading of our credit. the one republicans have introduced will. republicans are insisting we relive the endless partisan wrangling again, six months from now. i've said a short-term solution is not a solution at all and it puts us right back in this untenable solution a few short months from now. it gives the markets no
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stability. it gives the american people no certainty. and it gives the credit rating agencies no choice but to downgrade u.s. debt. it would cause interest rates to rise and effectively increase taxes for every american -- every american. market analysts and credit rating agencies have said a short-term fix would risk many of the same effects as a default. that's a risk our economy can't afford. if republicans continue to oppose a reasonable proposal i brawlt to the floor last night and which we'll vote on in the senate soon, it will be for political reasons driven by the ideological tea party who will be crystal clear that republicans don't care if we default on the debt. that's sad but true. after all, we've given them a plan they should, by all rights -- it should be garthed to pass the house -- guaranteed to pass the house and the senate support here, which we should have. it should pass both houses. yet they've trashed it right out of the gate. yesterday "the washington post" called this debate over whoaj to
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default on the full faith and credit of the united states of america "surreal" and "bizarre." that was their words. this commentary is valid. reasonable republicans have been offered everything they've asked for. still they rephos to give "yes" for an answer. all because of the tea party republicans. that's too bad, madam president. i would ask the chair announce the work -- the business today, the work for the senate today. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will be in a period of morning business until 12:15 with senators permitted to speak therein for up to 10 minutes each with the time divided and controlled between the two leaders or their designees with the majority controlling the first 30 minutes and the republicans controlling the second 30 minutes. mrs. boxer: madam president? the presiding officer: the senator from california. mrs. boxer: madam president, i want to thank leader harry reid
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for stepping into the breach in this situation and offering us a way out of this, what i consider to be, republican-made crisis. why do i say that? the debt limit has been increased 89 times since 1939. 55 times under republican presidents and 34 times under democratic presidents. never has either party ever brought us to this brink of default. never, never, never in the history of america. it is a man-made crisis. it is a republican-made crisis. it has never happened before. the real challenge we face is clearly with our deficit and our debt, and guess what the good news is there? we had this crisis before, this challenge before, and we stepped up to the plate and we passed a
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budget when bill clinton was president that not only balanced the budget -- and we didn't need a constitutional amendment to the constitution to do it -- we did it by working it out, by cutting out the waste and the fraud and abuse in government, by choosing to invest in important areas like education, high-tech, biotech at that time, which created jobs, which created so many jobs in this country, 23 million jobs. that was the absolute result of this very good budget. now, all a budget is it expresses the hopes and dreams of the people, the priorities of the people. so that challenge, that challenge was met before. so we know how to do it. you sit down, you figure out what's a waste of spending,
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what's important spending, and you pursue policies that create jobs. we did it before. we can do it again. it's a challenge, but we can do it because we did it. now, others will say, in order to do it, you have to have a balanced budget amendment to the constitution. well, the facts just don't back that up. in order to get a balanced budget, you simply have to balance the budget. you simply have to do the hard work to get it done. now, this man-made crisis, this republican-made crisis is totally unnecessary. i never heard one of these folks who says let's go into default -- i never heard them speak out during the george w. bush years when we raised the debt ceiling nine times. and some of them were around during the reagan years. 18 times the debt ceiling was raised.
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now, under george w. bush, my republican friends raised the debt ceiling by 90%. president obama is asking for an increase of about 18%. so, america, figure it out. all of a sudden, after putting two wars on the credit scarred, tax cuts to the millionaires and billionaires on the credit cards iks like my republican friends did, a prescription drug policy which was not paid for -- none of it was paid for; they phut on th--they put it on the credit cd and now they say, woe is me. they put it on the debt. well, they should have discovered that before. in eight years, george w. bush turned our surplus into ads 1.3 billion deficit. that's what our president obama inherited. now, we have a moment of opportunity here. and i think what senator reid
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has done is given us a way out of this mess. we put into place $2.7 trillion of cuts and we give a sense of certainty to the marketplace for 18 months that this debt ceiling is taken caver. now let's get back to business around here of taking care of this long-term deficit and debt challenge and creating jobs for our people and protecting medicare and social security and all the rest that we have to do. we have to build our infrastructure. i'm chairman of the committee that's in charge of the highway bill. we have good bipartisan corporation. but we need to get this resolved. the boehner plan is so short-term, it sends a chill through the marketplace. i used to be a stockbroker many, many years ago. and when the president got a
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call, the stock market went down. it's very sensitive to these things. and the boehner plan, according to some commentators, will cause a downgrade of our securities. and i don't think we should be in the business of down grading america, madam president. we should be in the business of lifting up america, of letting the people know we're taking care of their business. the republicans' interest is going after the middle class, the working poor to protect the millionaires and billionaires. well, here's where we are with that policy. the 400 richest americans have more wealth than the first 50% of the american people. imagine. the richest 10% of all americans control two-thirds of america's net worth. the average c.e.o. receives 180 times more in compensation than
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the average production worker. in 1965, c.e.o.'s made 24 times more in compensation; now 185 times. now, what you hear when you suggest that millionaires and billionaires pay just a little bit more to help america get out of this challenge that we face, you see a almost out-of-control defense from the republicans about why we shouldn't even consider asking them to pay even two cents more. they say don't tax the job creators. so i said to my staff, let's take a look at who are the job creators and what do they earn. as everybody knows, the small businesses are the biggest job creators, but i want to make it clear here only 1.4% of
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taxpayers with business income of over $500,000 per year are in that category. so what i'm saying is you say don't tax the job creators, and we're looking at taxes for people over $500,000 a person, that's only 1.4% of the job creators. so we're not touching 98% of the job creators. so don't get up here and say we want to tax the job creators. not at all. not true. we do want to ask millionaires and billionaires to pay their fair share. on july 21, 200 millionaires signed a letter asking congressional republicans to consider healing the budget gaps with increased revenue. higher taxes on them. they say despite our willingness to provide additional support to
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the country financially to ensure its continued well-being, despite the overwhelming support of the idea among the american public, despite the reality that millionaires like us are paying lower taxes now than any other time in the last 60 years, and despite the fact that the bush tax cuts are the single-largest cause of the deficit, you, they say to the republicans, have repeatedly refused to consider a reasonable step to address our country's fiscal challenges. and they say we are writing to reiterate our demand that you look to the millionaires and billionaires. look, our challenge of deficits and debt can in fact be met. we know the road. the road is clear. the road was really built by president bill clinton and the democrats at that time, and eventually a lot of republicans came on with us; eventually.
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in the beginning they predicted gloom and doom from the clinton budget. i have a bunch of quotes from members who are still here on the republican side who said the clinton budget is going to lead to a recession, it's going to lead to unemployment. it's going to lead to deficits. we went into a great period of prosperity. 22 million jobs, a budget in balance and a debt about to be extinguished down the road. that all got upended by a republican plan to tax to -- to lower the taxes on the richest americans and put it on the credit card. go into two wars and put it on the credit card. pass a prescription drug benefit and protect the big pharmaby saying medicare can't negotiate for lower prices. they put that on the credit card. so it is no wonder that we face this problem. when president obama got in, we were bleeding jobs at 800,000 a
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month, almost a million a month. and i would ask that i have one additional minute to sum up. the presiding officer: without objection. mrs. boxer: and so, president obama and all of us knew that there was frozen banking system. we had to make sure that that credit system was working. we had to make sure that we created some jobs. we passed the stimulus bill. and despite all the talk about how it didn't work, experts say it stopped a depression. so, yes, we had to add those things as well. and now it's time to pull together as americans. this isn't about republicans or democrats. the people of this country agree that millionaires and billionaires should pay more. but right now what senator reid has said is set that aside. let's get on with our work. let's get out of this mess. for 18 months get this out of politics. give a sense of certainty to the marketplace. and let's address the issues.
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and john boehner, who spoke to the nation last night, is presenting a patchwork quilt in a expires in a few months. we'll be back to this nightmare. we face downgrades of our credit worthiness. so, madam president, let's get behind the reid proposal and let's work together and get this country back on its feet. uncertainty is the worst, worst option. thank you very much, and i yield the floor. mr. durbin: madam president? the presiding officer: the senator from illinois. mr. durbin: i want to thank my colleague from california. this is an historic week in the united states senate, and she has spelled out what we face. i would guess most people around america are looking at washington and capitol hill now and asking if there's, if there are any grownups left. can adults sit down there in both political parties and solve our nation's problems? it is a legitimate question because we're up against the deadline of august 2, and the expiration of america's
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mortgage. the debt ceiling. what it basically means is for the first time in history, if we don't act, we will default on our debt. that's significant because the united states enjoys a reputation around the world, the highest economic reputation around the world, aaa bond rating is as good as it gets. if you're going for your credit score and you've got a aaa rating you're in good shape. you cannot only borrow what you need but at a good tr-frplt if we fail -- at a good interest rate. if we fail to do what we're supposed to do between now and august 2 and default on our debt, it will mean the promise of america to pay its bills has been broken. and it will mean that our creditors around the world will have questions about whether or not we can be trusted. when creditors have questions, they cover the risk by raising interest rates. so if the interest rate on
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america goes up 1%, just 1%, it costs us $130 billion a year added to our debt. project that over ten years. $1.3 trillion for every one point interest. so tempting fate and going to august 2 in that circumstance is not a good thing. not just because america's debt grows, but because interest rates all around america will then rise with it. so if you're borrowing money for a car, a home, on a credit card, your interest rates just went up. and congress, without passing a tax bill has just imposed a new tax on you. it will be the tax for defaulting on our debt ceiling. so what we're trying to do this week is to work out some sort of an agreement between republicans and democrats, house and senate and the president to avoid this crisis. as the senator from california
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accurately said, this is not a crisis like a natural disaster or even a terrorist attack. this is a manufactured political crisis right here on capitol hill. we don't have to have this. it's never happened before. what we're doing with this kind of high noon scenario -- wait till the last minute to solve your problem -- is creating a problem that is going to cost us dearly. and there are ways around it. senator harry reid is going to come forward on the senate floor on behalf of the democrats, and we hope with republican support, with a plan to deal with this deficit and this debt ceiling. what the majority leader will propose is that we will make cuts in spending which will reduce our deficit, $1.2 trillion in cuts over ten years. it's a lot of money, and i think it's a significant indication that we're serious about our debt. in addition to that, what we
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will have is an increase of our debt limit until february of 2013. now, it's only in washington, as one of my colleagues said this morning, that 18 months is considered a long-term commitment. what we know is if we don't make a long-term extension of the debt ceiling we're going to have to go through this scenario, political scenario again and again. each time we do, it calls into question the credit status of the united states. and so what we are going to try to do this week, with bipartisan support, is move forward in dealing with this crisis in a responsible way. reducing spending, extending the debt ceiling, and i can say that everything included in senator reid's proposal which he brought to the floor has been either proposed by or voted in favor of by republicans. so it is a bipartisan approach, and i think it's an honest approach.
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and i'm hoping we can reach an agreement on it. i see my colleague from maryland is here. i'd like to ask him before i proceed if he's asking for time in morning business and how much time is the senator looking for. as much as he can get. ten minutes. how much time is remaining in morning business on the democratic side? the presiding officer: 13 minutes and 40 seconds. mr. durbin: i'm going to be very brief and then yield the floor to my colleague from maryland. let me say this, madam president, i believe that we can deal with our debt responsibly, and i say that having been through a year and a half working on this issue. i was -- i'm still not an expert but i know a lot more about it now than i did at the start. we worked together, democrats and republicans, on the president's deficit commission and came up with a plan supported by 11 out of the 18 members, including myself, and a number of republican senators, democratic senators, senator kent conrad, chairman of the
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budget committee. we believed there was a way to reduce the debt by $24 trillion over ten -- by $4 trillion over ten years and do it in a sensible way. bringing into consideration not only spending cuts, but also reform of our entitlement programs and revenue. on the entitlement programs, many senators and many people get nervous when you start talking about social security and medicare. i will tell you, i'm committed to these programs. i believe in them. the reason i've stayed with this conversation is because i want to make certain that at least one or maybe more at the table feel as i do about the importance of social security and medicare. i believe we can make reasonable changes in each of those programs, preserve the basic benefit structure particularly for working americans and make sure that they have the promise of the security which these programs bring. i know that people in retirement wonder if the savings are going to last, whether the pension will be around. but, you know, they know for
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sure social security will be there. i want to make sure that promise is kept not just for the next 25 years but 50 years beyond and even beyond that. we can do it and making modest changes can achieve it. on medicare for elderly and disabled people, medicare is a bigger challenge. in six years or so we start running out of money. let's get serious about this. let's do things now that will avoid that crisis. we want to make sure people have the peace of mind of knowing they have health insurance. we can do it in a sensible, responsible way. let's do it together, not with a determination of ending the program. i'll never let that happen on my watch, but to make sure that the program has a long life, a solid life, a solvent life. and when it comes to revenue, there is a way to do this. $1.2 trillion is lost each year in our tax code to deductions and credits and exclusions and special treatment given to some and not to others. we can take a look at that and do it in a way that says we're
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going to preserve the basics that we need. yes, we need the mortgage interest deduction. yes, we need the charitable deduction. yes, we need to make sure that people have their health insurance exclusions from their income. we can do that and still lower the amount of tax expenditures and use that money to reduce the deficit. that is a reasonable way of raising revenue in a sensible manner. men and women of good faith in both political parties can do this. let's pass senator harry reid's proposal this week. let's avert this crisis. let's tackle the long-term deficit and debt challenge in a balanced way by putting everything on the table. we did it with the deficit commission. we've done it with the gang of six. we can do it again. what we need is the support of the american people to encourage us on beyond our critics. that's always going to happen. but beyond our critics to the kind of conclusion where people will once again feel a little pride in what goes on here in washington on capitol hill. i yield the floor to my colleague from maryland.
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the presiding officer: the senator from maryland. mr. cardin: madam president, let me first thank our assistant democratic leader, majority leader, for his incredible work on the subject, on the bowles-simpson commission, senator durbin, you were a real voice of reason and brought together diverse views. we need that this week. and then with the gang of six, with our colleagues on both sides of the aisle, you were able to bring us together achieving two goals. that's what we have to do. one is we need to raise the debt limit and secondly we need a credible plan to deal with the deficit. and i think you have added greatly to that -- accomplishing those goals, reaping across party lines, understanding it -- reaching across party lines, understanding that it cannot be what the republicans want, or what the democrats want, but we must work together. we have seven days away from the august 2 date. we have two goals. goal number one is to raise the debt limit so we don't default on america's obligations.
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raising the debt limit needs to be our goal number one. we've already incurred this debt. this is not about increasing america's spending. this is for spending that has already occurred and now we have to pay the bills. the cost of default is unimaginable to the american people. we'll pay more as taxpayers because the cost of government borrowing will go up. we know that. that's not speculation. we know that. the cost to every american will go up because the cost of home mortgages will go up, credit card costs will go up, student loan costs will go up. all of the borrowing costs will go up, but, madam president, it will also hurt our economy. it will cost us jobs. it makes no sense whatsoever to be here without raising the debt limit. senator reid's proposal does that through 12012. it gets the job done.
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speaker boehner's proposal does not get it done. another short-term extension. and we should listen to the experts in the market. christian cooper, who is a currency expert and trader said, "from the market's point of view, a two-stage plan is a nonstarter. there are significant risks of downgrade with a deal that ties further cuts to another vote only a few months down the road. given the significant resistance to do the right thing now." so speaker boehner's proposal just kicks the can down the road for a couple more months without resolving the problem. that's goal number one, the reid plan accomplishes that. goal number two is having a credible plan to get our debt urpdz control. -- under control. the president was right, as he explained how we got here last night. he went flew how, under the bush administration, the -- he went how, under the bush
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administration, how we took a surplus to a disft. cutting taxes not once but twice, by two wars that were not paid for, by spending programs that were not paid for. now we're in the situation where we have a nonsustainable deficit. that's accurate. we need -- it is our responsibility to make sure that we have a credible plan to deal with the deficit. leader reid's proposal gives us that glide path. i think all of us would like to see a grand deal, a grand bargain. that's not going to be achieved by august the 2nd. senator reid's proposal gives us the glide path for a responsible, credible plan to bring our debt under control. speaker boehner's proposal does not do that. it just basically says we'll deal with it at a later time. look at the down payment. leader reid gives us $2.7 trillion of deficit reduction now. that we can enact by august 2. well, speaker boehner gives you
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$1.2 trillion. it's clear that $2.7 trillion really gets us much closer to the $4 trillion goal that we all know that we need to achieve. but it also gives us a game plan to be able to achieve the $4 trillion of deficit reductions that we all know that we need to do. madam president, you and i are in agreement how we can get that done now. we know that. we have a plan. the problem is we can't get that done by august the 2nd because we can't get the republicans in the house to move on a balanced plan. we understand that. well, the reid proposal preserves all options. it gives us a way to get to the $4 trillion of deficit reduction that is clearly needed. it allows the use of a joint committee that will use a balanced approach. we have models they can look at. the bowles-simpson commission is a balanced approach. to bring in a credible plan to deal with the deficit. the gang of six gives us a balanced approach in order to
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deal with our deficits. so we have the model before us in order to get it done. but let me tell you why i think leader reid's proposal is the best way for us to proceed seven days before the august 2 deadline. it gives -- it gives the republicans basically what they've asked for. you know, we can't do this by democrats alone. we need democrats and republicans working together. the reid proposal represents the views of the members of the senate on both sides of the aisle. why i do say that? from the beginning the republicans have been saying that we have to have a dollar-for-dollar reduction in debt for a dollar increase in the debt ceiling. now, madam president, there's no relationship between our current spending and what the debt ceiling represents because, as i said earlier, it represents what we've already spent. but, okay ... that has been what the republicans said we had to do. leader reid's proposal does
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that. a $2.7 trillion reduction in the deficit, a $2.7 trillion increase in the debt ceiling. the second thing the republicans have asked for -- not all, but many -- is that we can't consider revenues in the package. now, i disagree with that. i don't believe you can have a credible plan to deal with the deficit unless you include revenues, getting rid of the loopholes, getting rid of shelters. we could do that without increasing rates. we've said that many times. but the reid proposal -- what we would vote on by august 2 that accomplishes our goal -- will do it without additional revenues. it preserves the right of revenues in order to have a credible plan to reach the $4 trillion target. but we get our $2.7 trillion without any revenues. something that the majority of the republicans have been asking for. the third point, with $2.7 trillion in cuts that the
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majority leader put on the table, represents the cuts that have been negotiated between the republicans and democrats. it was included with vice president biden, the $1 trillion in cuts in regards to our overseas operations was included in our line budget. so the list goes on. these are cuts that are achievable that have been already negotiated or agreed to between democrats and republicans. i applaud senator reid. i think senator reid understands the seriousness of us moving forward. it allows us to move -- to increase the debt ceiling and preserve our rights to negotiate and get the grand bargain done and has a fallback mechanism withiwith a joint committee that would have required votes on the floor to make sure we all have a right to vote up-or-down. it allows america to move forward and allows us to concentrate on job growth and security, which should be our focus as we rebound our economy
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for the future of our nation. for all those reasons, madam president, i hope my colleagues will support the effort of senator reid to bring us together to avoid the unspeakable default that could occur one week from today. with that, madam president, i would yield the floor. and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. mcconnell: madam president?
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the presiding officer: the senator from kentucky. oh, the republican leader. i'm not awake this morning. mr. mcconnell: i ask unanimous consent that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. mcconnell: last night the president explained to the nation the crisis that we face right now as he sees it. his hope was to lift the debate up out of the gritty legislative particulars, and we all understand that. unfortunately, the situation the president described last night bears very little resemblance to the realities on the ground right here in washington. i know the president would rather give speeches about our problems than resolve them, but he wasn't elected to talk about the united states; he was elected to lead it. in our system of government, that means working with people and a congress that you sometimes disagree with. this is not a unique situation. other presidents have been in a
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similar situation where they had to work with a congress composed of people, many of whom disagreed with them. last night the president rejected not just the only proposal that has passed either house of congress, he rejected the only plan the democrats have proposed as well, a plan that would increase the debt limit without raising taxes. just a few days ahead of a potential default, the president announced that he's the only person in washington still calling for a massive tax hike, even as his party has dropped their own demands for what we know will make the current unemployment situation even worse. in short, the president is now clinging to two things we all know congress can't support: a massive tax hike and the biggest debt limit increase in history aimed in his own words at getting him past the next election. as speaker boehner said last night, that's just not going to happen.
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there's bipartisan opposition to it in congress, so it was deeply irresponsible, in my view, for the president of the united states to present the american people with a false choice last night between tax hikes on the one hand and default on the other. the real choice is this: a bill that can get us past this moment of crisis, cuts washington spending, and actually gets through congress -- or one that can't. republicans have offered the only proposal that attempts to get at the root of the problem and which actually has a chance of getting to the president's defnlgpresidentdesk. that's why we'll continue to press for the legislation that speaker boehner has proposed. and we'll fight against anything that pretends to solve the problem but doesn't. the majority leader proposed a plan that's nothing more than another attempt to pull the wool over the eyes of the american people.
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madam president, the decision we make in the next 72 hours will have a real impact on every american. these decisions should be made based on how they will affect the people who are struggling to get a job, not how they affect some politician's chances of getting reelected. now, the president can claim to be concerned about this impending crisis, but one question continues to linger above every press conference he's called or every speeches -- every speech he's delivered. where is his plan to resolve it? republicans have proposed multiple plans that have support in both parties. it's time for the president to put his electoral preferences aside and do what's needed. americans are waiting, americans are waiting for the president to do what they elected him to do. not to lecture, but to lead. madam president, i suggest the
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absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: a senator: madam president? the presiding officer: the senator from arkansas. without objection, so ordered. the senator is recognized. mr. boozman: throughout the course of this debt ceiling debate, the american people have watched us work in utter disbelief with what they have seen. they understand that we need to get our fiscal house in order. they see what has gotten us into this mess, and they want it stopped before they agree to give us blanket authority to raise the debt limit. what they are saying is we must spend within our means, just as they have to do. well, we've got a way to do that. it is the cut, cap, and balance
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plan. it's already passed the house. the companion bill with 39 cosponsors has the support that it should be considered here in this chamber as well. i'm proud to say that i'm one of those 39 cosponsors of the senate bill. i signed on to the cut, cap, and balance bill because the american people, and more specifically, the people of arkansas, have demanded that we address this crisis now, not later. they know washington is not good with remembering to follow through on the things they promise to do later. some will say this is too simple an answer. they say that the fiscal mess we find ourselves in is a complex problem. it's really not, though. just look at the numbers. this year alone we will spend $3.7 trillion while collecting only $2.2 trillion.
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we borrow 40 cents of every dollar that we spend. president obama and the democratic majority in this chamber will say the fix to problem is to raise taxes. they may try to use other words and phrases like revenue enhancers when talking about raising taxes, but make no doubt about it, they want to put the onus back on the american people. there is a major problem with this approach. washington doesn't have a revenue problem. it has a spending problem. again, the numbers back this up. traditionally government spending is about 19% of our gross domestic product. since president obama has been in office, government spending has been much closer to 25% of our gross domestic product. this administration has raised federal spending to the highest rate, the highest peak since world war ii. so how do we solve this spending problem? we do it through cut, cap, and
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balance. cut now. the house bill immediately cuts over $100 billion in spending. cap for the future. the spending cap mechanism in this bill caps spending over the next ten years, bringing it down to less than 20% of our gross domestic product within the next five years. and the balance is for a balanced budget amendment, something our entire republican caucus supports in the senate, as do many in the democratic majority, at least according to their on-the-record statements. this bill prohibits the treasury from borrowing unless a balanced budget amendment is sent to the states for ratification. let's pass a balanced budget amendment and give the people back home the decision about whether they want to require us to operate under a balanced budget amendment. i think you will find that they
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overwhelmingly do. unfortunately, the senate majority, with no plan of their own for reining in the out-of-control spending, won't allow us to have a debate on this bill. last friday they moved to table the cut, cap, and balance act effectively ending any consideration of the bill. all of this reminds me of the debate over the house-passed budget we had a few months ago. the majority over here had strong words of criticism but no budget proposal of their own. again, strong words of criticism and no plan of their own. only this time it's worse. with our nation on the brink of default, the majority clearly feels it's better to score political points than have a debate on the merits of our proposal. they control the floor, the agenda, and the amendments that are accepted. if any member of their caucus wants to change the bill, they certainly have that option. but instead of having the debate, we get political theater
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from the majority. this is not what our constituents deserve. they deserve a real debate. they sent us here to work together, to prevent a catastrophe on par with that that has happened in greece, ireland and portugal. they want to see us get our fiscal house in order. that is what the root cause of this crisis is all about. we aren't just having a debate on raising the debt ceiling. if that is all this discussion is about, it would have been over months ago. nobody wants to default, so the debate that is going on today is about a much bigger problem. the out-of-control spending that has put us in this position time and time again. cut, cap, and balance is one way to solve the problem. it is a solution that helps us avert an immediate meltdown and brings a sense of fiscal responsibility to washington where it is so badly needed.
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madam president, i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mrs. hutchison: madam president? the presiding officer: the senator from texas. mrs. hutchison: i ask unanimous consent that the quorum call be lifted. the presiding officer: without objection. mrs. hutchison: madam president, i rise today to speak about the military pay act of 2011. we have been on the brink of closing down government earlier this year, this spring, and we came to a responsible conclusion and continued our government, and we were also able to continue the tax cuts that have helped spur our economy as best it could in light of the spending and the debt that has been accumulated. now we are looking at yet another potential government shutdown. now, madam president, it is so important that we take the priorities. we know what's happening right now in washington.
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everyone is focused on whether there is going to be an agreement to lift the debt ceiling, because if there isn't, then we are going to have a situation in which there is a potential for default, depending on the decisions for what gets paid first. we do have revenue coming in that can be spent, even if the debt ceiling is not lifted. however, the president can choose the priorities. what i am asking that we do today is set some of those priorities. what i am asking is that we take our military personnel out of any limbo. so let's go back to what we did earlier this year when we were in the continuing resolution debate, which also had the poe tenge for shutting down government. when that happened in april, i
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joined with my colleague on the house side, representative louie gohmert. we both introduced a bill, the ensuring pay for our military act, senate bill 724. we got 80 cosponsors of that legislation -- 80 oust 100 in the united states -- 80 out of 100 in the united states senate stepped up to the plate and said, yes, we need to take care of our military, even if government shuts down. that was april. now the -- since then, i have introduced a new bill. the new bill is senate bill 1365, the protecting military pay act of 2011. now, that one sets two priorities. it sets paying our debt, the interest on our debt, and our military. it is those two priorities. social security is in a
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different account, and it will automatically be paid from that account. i actually am cosponsoring another bill that is also cosponsored by many senators and many house members that would require that the president pay our debt, interest on our debt, our active duty military, and also social security recipients. even though that would automatically happen. the legislation that i introduced in april that would take care of our active duty military is supported by the military officers association of america, the amvets, the american veterans, and the national military family association. the new bill that i've introduced, that adds the debt to be paid off along with our military, just sets the priorities. and here's what if doe here's ws says that if we have any kind of
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a government shutdown or we have a situation where we don't lift the debt ceiling and, therefore, we have to prioritize our spending according to the revenue that is coming in, there are two things that will be done: we want to pass the law so there can be no discretion that you will pay the debts and you will pay the military. you will pay the active duty military. that is what the bill does, simply and clearly. and here's the situation. if the debt ceil something reached -- if the debt ceiling is reached, $29 billion would be set aside for august for the payment of our debts. $2.9 billion would be added to that for active duty military pay. so you're allocating out of the billions that would be coming in in august -- you would allocate those as the first two priorities, and social security would be paid out of the social security fund.
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so it is essential, madam president -- and i am going to ask our majority leader to let these bills come up, at least one of them, that says we will pay the debt, we will pay our military, and we know that social security will be paid. it is tremendously damaging for our military to be getting the news in afghanistan and iraq of all the upheaval in washington, because they're getting the news, of course. and for them to worry, oh, my gosh what happens august 2 if my paycheck isn't there or my wife or my husband -- for my wife or my husband to be able to use that to pay our mortgage or the basic expenses? i just want to put it in perspective here. we have people in the military with boots on the ground by the
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thousands that are making under $20,000 a year. now, those are people who are living paycheck to paycheck. they don't have the luxury of having a big savings account with that kind of income, and especially if they've got children. my goodness, they're making under $18,000 a year, some of these younger junior members of the enlisted corps. so i don't think we ought to make them worry for ten seconds if they can pay their basic bills for their housing and the food for their families. in my state of texas, there are 28,000 brave men and women deployed in the support of operations in iraq and afghanistan. there are more than 97,000 service members deployed who are
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married and have children waiting for them at home. there are 145,000 troops deployed in iraq and afghanistan who are working long hours every day in the desert heat to protect our freedom. to make sure that we are doing everything we can to root out the terrorists that have attacked america. these men and women all raise their right hand and volunteered to go to defend this nation. the very least that we can do while we are in this kind of budget negotiation, which is making a lot of people nervous -- i have faith that we're going to do the right thing in the end, but it's not clear yet. we're pea a week away. -- we're a week away. so i don't think we should make these people think about whether
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it's going to happen and if there's going to be delay in a paycheck. so i hope that we'll be automobile to bring this bill up. i can guarantee, if the majority leader will bring up my bill, it will pass. it has 80 cosponsors. the new bill is the same thing except that it just makes the debt payment the priority, which you would hope would not have to be done, but, nevertheless, let's assure that our debtors know that we're going to pay the interest on the debt and our military who are in harm's way right now will not worry about their family having the paycheck that they need. madam president, we have about a week. all of us had hoped that it wouldn't take this long, but we have our different views. there's no im question about it.
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i am one who believes that we should raise the debt ceiling only with reforms that will assure the markets, not just for the next week or the next six months, but for the long-term that not only are we going to pay our debts but we are going to bring down the cost of government so that we will not have to raise the debt limit again. we must take the reform actions that we can take right now. we can fix social security for 75 years with relatively little cuts in increases in social security colas and with a trajectory that will put us on a actuarial table for an age that has certainly changed since social security was passed. very little change. it wouldn't affect anyone who is
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in the upper area of going into social security. the bill that i've introduced wouldn't affect anyone age 58 and above. some -- or 55 and above. so we can do the big things that will show our debtors and the rest of the world that we can live within our means and that our democracy can work to do the things that will make us good not for the next week, not for the next six months but for our children and grandchildren. that's what we ought to be doing right now, and i have faith that we're going to have to do something temporary for the next few months while we work out the details, but i know if we get together, we can do this. but i surely don't want our military to have to worry about it for one week or three months or six months, because they
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deserve better. thank you, madam president. and i yield the floor and i suggest the absence of a quorum. mr. thune: madam president? the presiding officer: will the senator withhold mehr quorum call? -- withhold her quorum call? will the senator from texas withhold her quorum call? mrs. hutchison: i will. mr. thune: thank you, madam president. the presiding officer: the senator from south dakota. mr. thune: i am happy to be a cosponsor of the senator from texas's legislation. she's absolutely right. floss more deserving group of -- there is no more deserving group of people in this country our our military. we need to make sure under no circumstance they are no not pa. madam president, we are a week away now from the time in which we would have to request additional borrowing authority in order for our federal
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government to pay its bills. we've known it's coming for some time. and it strikes me at least that as most americans observe this debate the thing that they are probably most concerned about is how this is going to impact them and their economic circumstances. and frankly, i think all of us ought to be looking at this with an eye towards how does this impact the economy? there's been a lot of discussion about that. the president of course made yet another speech last night in which he tried to claim the high ground in this debate, but frankly, madam president, i think the president himself has really relegated himself to the sidelines in this debate simply because many of the things that he was proposing to do as a part of this debt limit increase would be very counterpredictive -- or counterproduct tirvetion should i say, when it comes to the economy. and i would also add, madam president, that the president
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continues to sort of assign blame and blame the previous administration for the circumstances in which we find ourselves. and clearly he inherited a difficult set of economic circumstances. i think we would all concede that. what i would argue, madam president, as the president has made that situation worse. he's made it much worse. if you look at just since this president took office, we have now 2.1 million more people unemployed than there were when he took office. we have seen the federal debt rise. the number of people receiving food stamps has gone up by 40% since this president took ossments he has added $11,000 to the debt of each individual in this country, since he took office. gas prices are up. they've doubled, almost 100% since this president took office. and the cost of health care has gone up 19% since this president took office. despite assertions during the
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debate on the health care bill last year that it was going to reduce health care costs. so we've seen all these economic circumstances worsen on this president's watch. and it strikes me at least as we lack at this debt ghat we ought to be thinking about what can we do to get out of this economic downturn that we are in. we're growing at a very sluggish rate, a little under 2%. we've got unemployment that's over 9%, 9.2%. as i said, 2.1 million more people unemployed than when the president took office. so, clearly, the focus of our discussions as we lead up to this vote on the debt limit ought to be about the economy, getting people back to work, growing the economy because, frankly, i think there are a couple of things that we have to do to get out of the debt situation. one is we've got to cut government spending. but secondly we have to get the economy growing and expanding again. clearly that ought to be the focus. when i said the president in his proposal, at least as it's been reported because we haven't seen
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any proposal from him. but in the reporting about his discussions with the congressional leadership, it's been suggested that the president has consistently advocated for more revenues, more taxes, and in fact as recently as last friday when there was still -- quote -- "a big deal" on the table, we were still looking at a possibility of actually striking an agreement, the president upped the ante even further. he moved the goal post yet again, wanted $400 billion more in higher taxes. it strikes me that, and i think most americans right now, the worst thing that you can do in an economic downturn, the worst thing you can do when you have 9.2% unemployment is raise taxes. there isn't a tax i can think of that will create a single job in this country. it will make it more difficult for our small businesses to create jobs. so that was a nonstarter. and it became clear, i think, over time that it was going to continue to be a nonstarter despite the president's
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insistence that tax increases be a part of whatever deal was struck here. we find ourselves where we are today, and i think it is important to think about where we have come from and look at the time in which, the time that's now past and where we stand today. i think it's important to point out that as we talk about budgets, as we talk about spending, we talk about debt, that we -- our job here is to pass a budget. that's where it all starts. we haven't passed a budget now in 818 days. in fact, the last time the senate approved a budget was back on april 29 in 2009. so it's been now 818 days since the most recent budget was approved by the united states senate. so we're operating without a budget. imagine how complicated it would be for any state government, any business in this country if they continued to operate without a budget. that's what we've been doing here in washington now for 818
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days. this year we came around january 6 of this year. we knew this debt limit vote was coming out thr-fplt secretary geithner writes to congress asking that the debt limit be increased. that was back in january. at that time the obama administration also was pushing for a clean debt limit increase. in other words, a debt limit increase that did not include any kind of spending reductions or spending reforms. just wanted a $2.4 trillion, $2.4 trillion blank check to raise the debt by that amount. well, we came in to february of this year of 2011, when it came time for the president to submit his budget to congress. that budget seemed to be in complete denial of the reality that we find ourselves in today because that budget would spend $46 trillion, add almost $10 trillion to the publicly held debt over the next decade as well as increase taxes by
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somewhere on the order of $1.5 trillion, $1.6 trillion. it had more spending, more debt and higher taxes at a time when we're in an economic downturn, we've got high unemployment and we've got year-over-year deficits that are adding massively to the debt in this country. so the president's budget was met with a thud, as you would expect up here, when it was presented to the congress. now, as we went on in the year, in march of this year, march 31 to be exact, the senate republicans introduced a balanced budget amendment. we recognized that in order for us to get our fiscal house in order to start living within our means, to quit spending money we don't have, we've got to have some kind of a discipline imposed on the congress or reurlt that we balance our -- or requirement woo that we balance our budget every year. there are 49 states in this country that have some form of a balanced budget amendment in their constitution, some sort of requirement that forces them to make their books balance at the
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end of the year. and so we introduced a balanced budget amendment, still hope at some point to get a vote on that. that hasn't happened kwr*ed yet, but that certainly is something we want to enter in this debate because we think it is important not only to deal with spending in the near term but also coming up with a solution in the long term, and a balanced budget amendment would certainly accomplish that. on april 11 of this year, chairman paul ryan of the house budget committee, introduced his budget in the house of representatives. of course on april 13, right after the submission of that budget, the president then gave a -- quote -- "revised budget speech." it was interesting because the congressional budget office director elmendorf later stated that the c.b.o., the congressional budget office, doesn't score speeches. so they couldn't put a -- they really couldn't attach any sort of numbers to the president's speech because they don't score speeches. we have yet to see any kind of an actual submission of a plan
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from the president prior to his original budget submission which, as i said, came in with higher taxes, higher spending and higher debt. on april 15, in accordance with the schedule that's required under the budget act, the house did pass their budget. and so the republicans on the senate budget committee asked the president to submit a revised budget based upon his speech. that revised budget was never submitted. you had a house-passed budget. you had the president sort of on the sidelines out of the debate. and then in may of this year, republicans in the senate budget committee -- and i'm on that senate budget committee -- were told to expect a budget markup which never materialized. and so, we didn't have a -- we still don't have a budget in the united states senate. the budget that was passed by the house of representatives was roundly criticized by the senate and by democrats here in washington. but it is the only budget proposal, actual proposal that
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has been voted on that we have seen literally here in over 800, now 818 days. as we knew this vote on the debt limit was starting to get closer, the discussions picked up in terms of having some meetings to determine how we might proceed, what we might do to put a package in place that would allow to us raise the debt limit but do it with significant spending reforms and spending reductions. vice president biden, they held their very first meeting on may 5 of this year in 2011, and those discussions continued on for some time. we did have on the floor of the united states senate, on may 25 of this year the president's budget that he submitted to congress back in february. so we actually had a vote on that. that vote was 97-0 in opposition to the president's budget. there wasn't a single republican or a single democrat in the united states senate that said that the president's original
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budget submission is something that they wanted to be associated with or wanted to support. not a single vote here in the united states senate for the president's original budget submission. well, we got into june continued, and there was hope, i think, that there would be some agreement between the president and congressional leadership on how to proceed with this debt limit vote that comes up ahead of us now sometime next week. those discussions continued, as i said, as recently as last week. finally startd to unravel and fall a apart at which point it became clear that we were going to need a solution and an answer. again, the house republicans put together and passed a proposal called cut, cap, and balance, which would have cut spending now, immediately, cap spending in future years and put in place a balanced budget amendment that would ensure in later years that we had that kind of discipline that is so important and so lacking here in washington. that was on july 19 of 2011,
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when the house passed that legislation. so it came over here to the senate, and we had a vote on it here in the senate on july 22, last week, and the senate democrats voted to table the cut, cap, and balance approach and denounced it as not a serious effort to do anything about the fiscal circumstance in which we find ourselves. so we didn't get a chance to debate it and get to an up-and-down vote. we had a tabling motion and a debate on a tabling motion by the democratic leader, and as a consequence that was defeated. and so we don't have anything yet in place that would deal wet debt limit coming up -- deal with the debt limit coming up ahead of us next week. that's where we are today, madam president. as recently now as yesterday the house republicans have again taken the leadership and put forward yet another proposal. i expect that they're going to vote on that sometime later this week, perhaps as early as
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tomorrow. we have now evidently before us something that the senate leadership, senator reid has put forward that we may end up having a vote on this week. but somehow, some way we have to get to where we solve this before next tuesday. i am not among those who believes that it is an option for us to get past next tuesday and tphepb to try and figure out -- and then to try to figure out what happens next. i believe we need to act. we need to act in a way that is responsible. but we need to act in a way that addresses the real issue here, which is not the debt limit, but the debt. and i would point out that when the president originally requested -- and i think he reiterated that request in april -- for a clean debt limit, there was an assumption there that congress would just give him a $2.4 trillion increase in the debt limit without any kind of attempt to rein in the real problem here, which is the debt. and so we have been consistently advocating to try and get
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spending reductions, spending reforms into this equation. the president has consistently advocated in favor of tax increases. to him, this is defined as a revenue problem, not a spending problem. most of us see this as a spending problem, when you've got the kind of spending as a percentage of our entire economy that is at the highest level literally since world war ii, we have fundamentally a spending problem. it cannot be resolved by raising taxes on small businesses. it needs to be resolved by cutting spending. and when we cut spending, i believe we will also put in place the confidence that the economy needs to start picking up and growing again, and we'll get the other component, the other element that's so important to getting out of this mess, and that is expanding, growing vital economy that is creating jobs and creating greater prosperity for the american people. so, this is where we are. we're here in the last week. the president is essentially, i think, missing in action on this. his proposal to raise taxes which he talked about again last
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night in his speech is old news. it's yesterday's news. we know that's not going to pass in the house of representatives. it probably wouldn't pass here in the united states senate. right now the simple math is we have to be able to pass something by next tuesday that can get -- we have to put something forward that can secure 217 votes in the house of representatives and 60 votes in the united states senate. some of us aren't going to like maybe certain elements of what's going to be put forward. but what i can tell you is we have come a long way in terms of steering this debate away from the president's original budget proposal, which, as i said, doubled the debt over ten years, massively increased spending, massively increased taxes, and from the point where the president was asking for a debt limit increase, devoid of any spending cuts or spending reform; simply a $2.4 trillion blank check that he would be allowed to raise the debt limit to a time where we are actually
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talking about significant reductions in spending, both in the near term and in the long term. and whether the proposal that passes the house this weekends up what we ultimately vote on here in the united states senate, it is the only viable option out there. the president doesn't have a plan, never has had a plan. senate democrats don't have a plan, haven't had a budget in 818 days, have yet to put forward anything until, as i said, this most recent idea that senator reid came up with. but we really are up against the clock. we need to get this done. the american people expect us to get it done. the markets expect us to get it done. not doing so would put at great risk our credit rating and our ability as a nation to continue to function and to attract the type of credit that we need to keep our government going, unfortunately. i hope in the end what comes out of this is some reforms that will put us on a path where we are starting to take that debt
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down, where we're not borrowing literally over 40 cents of every dollar that this government spends. that's where we need to end up. but for now at least we have got to get a measure in place by next week that doesn't raise taxes in a way that would hurt the economy, that gets discretionary non-defense spending and, for that matter, defense spending under control in the near term and puts in place a process by which we can get a result on reforming entitlement programs and dealing with what we call the mandatory part of our budget. so, madam president, that's kind of where we come from. it's been an interesting, interesting path to get here, but there's a lot of revisionist history that gets put forward. and i just want to remind my colleagues where we come from, because i think it is important. it informs the decisions that we'll make today. but for the president to suggest for a minute that somehow the house republicans are to blame for where we are today just is
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not consistent fact. it's completely contradictory to the facts. it is the house republicans who passed a budget on time back in april. it is the house republicans who passed a plan last week, a cut, cap, and balance plan, to deal with this debt limit. it is the house republicans who tomorrow will vote on yet another proposal put forward after the president upped the ante last week and made it clear that his, the only way that he would accept a deal would be with significant tax increases on the american people and the american economy at a time when we can ill afford it. so i hope that as we proceed this week in the days -- and the days are numbered here -- that we will get a piece of legislation on the floor of the united states senate that can secure the 60 votes that are flees for us to avoid -- that are necessary for us to avoid meeting that trigger next week and to do something that would address the long-term issue of spending and debt, get spending under control and actually, in
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my view, put the conditions in place that would enable economic growth and job creation in this country so we can both coted spending and grow the economy, which in my view are the two elements that we need to put the country back on a better path w that i yield the floor and ask my colleagues to work with us against this deadline this week to get in place a solution to this problem that deals with the fundamental issue, and that's the issue of washington's overspending and starting to rein that in. i yield the floor. mr. johanns: madam president? the presiding officer: the senator from nebraska. mr. johanns: i want to complement the senator frocomplm nebraska. we are seven days away from literally a crisis in our country. we are down to a point where
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it's getting even difficult to try to figure out what the time lines naturally built into the process, how you get from here to there in seven days. and yet that's what faces us. last night, like many americans, i watched and listened to the president and listened to speaker boehner. i must admit when it comes to the comments made by the president, i don't understand where he is coming from. he talks about higher taxes and more revenue when the reality is that at this late date, he is the only one talking about that. now, i have been one of those people that has said for a long time, we absolutely need to engage in a process of reforming our tax code. it's too complicated. it's almost an antigrowth piece
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of work. i'm anxious to work with my colleagues, but with seven days left to try to suggest that there will be a massive amount of new taxes just doesn't make any sense. that's not in the reid plan. it's not in the boehner plan. and yet there it is. well, here we are. we are literally seven days away, and as i said, ace watched those comments last night it looked to me like campaign rhetoric. it looked like positioning for the next election. it looked like class warfare. what it did not look like to me was presidential leadership. and yet our creditors around the world are watching this debt limit debate unfold, and they are as shocked as all of us are by the lack of leadership coming out of the white house. well, just this weekend, the
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president was presented with a bipartisan approach. i found it reassuring over the twondz know that -- i found it eassuring over the weekend to know that our leaders in the senate were trying to work their way through this. it is a very difficult issue. i thought that with that kind of effort, when an approach was presented to the president, he would naturally embrace the approach. with only one week left, that made the most sense to me. yet, surprisingly, the president rejected the approach. the reason: irk the reaso the reason, as he has said so many time, the president does not want to deal with increasing the debt limit next year during his campaign for a second term. now, i find that shocking. since a last night when he addressed the nation, he
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expressed great concern about our debt limit negotiations being in a stalemate. yet he could have used that opportunity by accepting the bipartisan proposal that had been presented to him just a day or so earlier. he had opportunity to show the type of leadership our country needs and is crying out for, but he decided to reject the plan and retreat to political talkingpoints. the president also said that he would veto speaker bai boehner's approach claiming that it kicks the can down the road, claiming that that's what it would be. well, let's look at that. let's examine what the president is trying to convince this nation of. over the last 25 years, congress has increased the debt limit 31 times. 22 of those 31 times were for
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less than a year. yet the president claims that he'll veto anything not extending into 2013. it defies logic to decry our debt and then veto anything unless it allows more record-setting debt. and that is exactly what he is pledging that he will do. veto anything less than the largest debt limit increase in the history of the united states of america. the largest. his last debt limit increase in january was the largest in history at that point, $i $1.9 trillion. yet instead of hitting the brakes and saying, whoa, time out, this is getting us in trouble, the president is doubling down, demanding yet another record-setting budget
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buster. now, who does the president think is going to pay off all this debt? it will be our children and our grandchildren. passing multiple trillion dollar debt limit increases without addressing our addiction to spending does far more to kick the problems down the road. it sends the problems over the cliff, in fact. yet despite this reality, the president continues to accelerate as we get closer and closer to the cliff. the president just recently said this, and i'm quoting: "the only bottom line i have is that we have to extend the debt ceiling through the next election into 2013." unquote. while numerous issues accompanied this line of thinking, let's hit some high points. our national debt is more than $14 trillion, and the president
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is requesting to increase it to $16 trillion. the largest in our nation's history. so why is the bottom line only about the length of the extension, not about spending reductions that put our country back on track? unfortunately, the president's only fundamental concern is how do we kick this past the next election? above all else, not good policy, not what is best for our citizens, but the number-one goal is how to get past the next election. and this is unfortunately his bottom line. it is simply astounding that the campaign of hope and change has become such business as usual. simply raising the debt ceiling, absent any meaningful spending reforms, just won't work.
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so now we find ourselves in one heck of a mess. with about a week to go, the latest in the debt limit saga is a proposal that was introduced last night by senator reid, but here's why this latest plan has so many problems. policy-wise, it just doesn't hold together. the plan claims $1 trillion in savings from reduction in troop forces. these savings assume that troop surge extends into perpetuity which never was the plan, so it assumes savings from stopping spending that was never scheduled nor even requested. it's like reaching into the air and grabbing saifntle essentially, this plan counts savings tha that were scheduledo happen.
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second, the plan counts $400 billion in interest savings on that savings relative to the troop money that wasn't going to be spent, wasn't asked for. in other words, not only does the plan count nonexistent savings, it then compounds the policy problem by counting nonexistent interest savings on that savings. you simply cannot count savings that were never intended to happen. now, we're dealing with a ticking time bomb here. we've got rating agencies saying, my goodness, your debt is so out of control that unless we see a plan, we won't be fooled by the gimmicks. and yet this policy approach doesn't hold together. you see, the rating agencies
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justifiably so want to see real budget savings that actually help to improve our balance sheet. well, mr. president, we are at a critical time in our nation's history with one week left. the american people are yearning for bold leadership, not another shell game. heated rhetoric and charged accusations, they're not going to fix the fiscal situation. i stand ready to work with my colleagues on a is a luges, and i urge the president -- on a solution, and i urge the president to do the same. let's quit defending what is really indefensible, and that is worrying about getting the can kicked past th down the road pae next election. and lase figure out how to -- and let's figure out how to best address this. there was a plan that came out
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recently dubbed from the gang of six and the presiding officer and i have had some interest in that plan. but we all acknowledge that it is going it take time to put that plan in place, to debate that plan to bring it to the floor, to do the things that are necessary. and we've got to take action now. i'm a part of a group that says, look, let's take a long, hard look at that plan. let's see if that's the plan that we can move down the field to success. well, we have just seven days left. we need to face the reality that seven days from now we will be within hours of hitting our debt ceiling. and incidentally, to those who are arguing, no,es it is not august 2. well, if it is not august 2, it is close to august 2. we are face ago real problem where there won't enough mea moy
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the bills. many say, just pay the interest on the defnlt make sure you get that done. i'm not topped that. don't want to default on our debt. but that means we have about 50 cents on the dollar in august according to a cash-flow statement done by the bipartisan policy group, and that means that 50% of those out there who would otherwise receive some type of payment from the federal government woangtsz get it. -- won't get it because there just simply isn't enough money to pay the bills. so what does speaker boehner's plan do? it is a plan that is realistic. it says, look, seven days. we've got to come to grips with where we are at in the next seven days. or we can simply suspend rational thought, believe that
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the record-breaking debt increases to accommodate record-setting debt is somehow a possible course. it is not. i'm more apt to believe the president's own words. when the debt limit increase was $781 billion to raise our borrowing authority to $9 trillion, then-senator obama was in the place where we're in today deciding on whether he would vote for a debt ceiling increase. and he called the situation then -- quote -- "a failure of leadership." unquote. he went on to say, quote, "increasing america's debt weakens us domestically and internationally," unquote. well, we were at $9 trillion then, and really unforgivable amount of money. today we are at $14.5 trillion, and the steam engine is just firing away, building up more
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and more debt. senator obama's words were as truthful then as they are today. yet now he's done a 180. his presidency has hit the turbo booster when this comes to record debt. the presiding officer: all the time reserved to the republicans has expired. mr. johanns: thank you, mr. president. . yield the floor. mrs. murray: mr. president, i have ten unanimous consent requests for committees to meet during today's session of the senate. they have the approval -fl majority and minority leaders. and i ask unanimous consent these requests be agreed to and printed in the record. the presiding officer: without objection. mrs. murray: thank you, mr. president. mr. president, we are now one week away from the unthinkable. the prospect of the united states of america defaulting on its loans for the first time in our history and not making good on the promises that we've made to families and veterans and senior citizens across the
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country. i am deeply disappointed we've gotten to this point. if we can't come to an agreement by august 2, the consequences for our nation and our economic recovery will be dire. a few weeks ago the bipartisan policy center put out a report that was actually authored by a former bush treasury official about what would happen if congress failed to act and if the administration was forced to make desperate spending decisions in august. the scenarios were really grim. potentially at risk are the benefits and health care that we owe our veterans, loans for struggling small businesses, food stamps for people who are struggling to buy groceries, social security checks for our seniors, unemployment benefits for millions of workers who are desperately looking for jobs today, and even active-duty pay for our military. if the debt ceiling is not raised, we also face the very real and frightening possibility of our economy falling back into another deep recession.
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interest rates going up for our families and consumers, millions of workers losing their jobs, and small small businesses being forced to close their doors. these risks are unacceptable. people are still recovering in this tough economy, and they can't afford today to have that rug pulled out from underneath them. many families from my home state of washington have reached out to my office throughout this debate trying to figure out what they would do if the support that they depend on to stay in their homes and put food on their tables suddenly got cut off. and they have a pretty simple message: get it done, compromise, and put american families first. one letter came from ann phillips from tacoma, washington, who after 18 years of working was laid off during this recession. ann told me about how she felt. she was doing the responsible thing by getting herself up, dusting herself off, going back to college. but now she is worried sick because of the fact that the
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interest rates she pays on her student loans which she relies on to pay for her school would shoot up if we default. in her letter, ann made clear who the real victims of default would be. she said -- and i quote -- "ultimately people like me, my husband, my family and all the people i know who are doing their best every day to make a contribution to society will pay the expense." and ann is not alone in her concern. i've heard from veterans like kenneth huff, a retired master sergeant from olympia, washington. he spent 28 years serving our country. he told me how through a life in the military he learned the value of compromise and how he's tired of the way the people's work is not being done. he wrote -- and i quote -- "i agree we can cut back on spending. i know we can do a better job. but not on the backs of the very poor, the middle class, veterans, and our seniors who
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are on social security and medicare." i've also heard from be social security recipients like alissa terry from pwelgham, washington, who told me how important that monthly check is to her and what it would mean if she didn't get it next month. she said -- and i quote -- "social security is my lifeline. it stands between me and homelessness." mr. president, these families and seniors deserve to have the certainty of a federal government that stands ready to pay its debts. they do not deserve to turn on the news every day and read about the political games the house republicans are playing with their lives and economic futures. you know, democrats have been at the table. we've been ready and willing to compromise for months and months. we know we need to get this done. we have offered up compromise after compromise. we have come to the middle and beyond. we have offered up serious and
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deep cuts in federal spending. very hard for some of us to do, but we put it on the table. then we offered even more. bulb again and again the house -- but again and again the house republicans have said no. they refuse to compromise and they refuse to come to the middle. and time and time again they seem to be more interested in satisfying the most extreme elements of their base than on finding real solutions for the people of this country. mr. president, the house republicans even sent us a bill they call cut, cap, and balance that is not widely -- that was not only widely understood to be a political gimmick but it had no chance of becoming law. not only would it have been absolutely devastating for families and seniors across the country, but it managed to waste precious time here in congress at a point when that resource is getting scarcer and scarcer. so we're down to the wire. they need to stopl finding
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ways -- stop finding ways to say no and start figuring out what they can say yes to. mr. president, the bill that we introduced last night is a compromise. i don't believe it's perfect, but it gets us to where we need to get today to protect families and small businesses across america from market uncertainty not just for a month or two. that's not what american families need today. they need to know that they have that economic certainty and we won't be back in this ball game in just a few short months going through the same thing with people worried about their social security checks and veterans worried again and the markets uncertain. the legislation that was introduced last night does make deep and serious cuts to government spending. savings that have either been discussed and agreed on under previous negotiations with republicans or that republicans have actually used in the budget that they recently passed themselves. it does protect medicare and social security that we promised to our seniors. it does not increase revenues,
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something many of us have argued time and time again need to be a part of a balanced approach to a conclusion here. but we understand that compromise is important. so it doesn't increase revenues, and that appears to be something my republican colleagues have almost single mindedly focused on through this process. so we have given on that. it puts our country on a more sustainable fiscal track, and it allows us to continue, importantly, to work to reduce the debt and deficit without the threat of economic calamity hanging over our heads, like the current house proposal does. mr. president, on this side, democrats have bent over backwards to get this done. we compromised, we compromised again and then again, and the bill that was introduced last night on our side is the fruit of many compromises. we did this not because we think this is the ideal way to tackle
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this issue. democrats do want a larger and a more balanced package that we believe will address our problems in a responsible way for years to come. but we put this forward because we know the american people today want results, not rhetoric, and we know the consequences of inaction are far too high. so, mr. president, i call on our republican colleagues to support this legislation. stop playing politics with the american economy and work with us to solve this problem for the american people. thank you, mr. president. i yield the floor. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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